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20 Oct 2020 | 13:08

SP Angel reiterates 'buy' for Scotgold, says Cononish undervalued

(Sharecast News) - Analysts at SP Angel hiked their target price for shares of Scotgold by 29% to 182p, arguing that investors were overlooking the potential upside from the outfit's Cononish gold and silver mine in Scotland. In a research note sent to clients, analyst Sergey Raevskiy said that with £12m of capital outlays at Cononish already disbursed, the net asset value from the project to Scotgold was currently £103m or 182p per share.

That took into account both the firm's estimated net debt position and the effects of recent equity raisings, the analyst said.

Scotgold's aim was to pour first gold at Cononish on 30 November, turning it into Scotland's first commercial gold mine.

It was also planning to carry out a comprehensive exploration across the 2,900 square kilometres of its land package in Scotland's Dalradian Belt.

"We highlight that no value has been assigned to an exciting exploration package reflecting its current early stage status that in turn offers further upside potential to our NAVPS subject to results of future exploration works," Raevskiy said to clients.

"We reiterate our BUY recommendation and look forward to the news of the Cononish commissioning next month."
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